Market Update – March 2016

Key Points for March 2016:

The RBA kept the overnight cash rate at 2.00% at both the March and April meetings.

In fixed income, the 3 Month Bank Bill Swap Rate and the 10 Year Australian Bond Yield rose by 0.12% and 0.03%, respectively, in March.

Corporate debt spreads, as measured by the iTraxx Australian Index, fell to 136.28 in March from the previous reading of 155.77.

Australian shares recovered over the month, with the All Ordinaries Index and the S&P/ASX 200 Index increasing by 4.12% and 4.14%, respectively.

Domestic listed property followed the broader market gain, returning 2.45% over the month.

While global equities were positive in most regions, the Hong Kong market was the best performer, gaining 8.71%, as measured by the Hang Seng Index. The US also did well, adding 7.08% by its price weighted Dow Jones Industrials Index and 6.60% by its market value weighted S&P 500 Index.

Europe underperformed on a relative basis, despite gaining 1.08% over the month, as measured by the STOXX 50 Index.

Global commodity prices continued to recover in March, gaining 4.47%, as measured by the US$ CRB Spot Commodity Index. Oil and Iron Ore prices had the largest gains, rising 9.39% and 10.93%, respectively, in US Dollar terms.

The Australian Dollar appreciated versus most currencies in February, surging 7.24% against the US Dollar, 3.60% against the Euro, 3.73% versus the British Pound and 6.40% against the Japanese Yen.

The Australian Trade Weighted Index (TWI) rose by 3.87% over the month, ending March at 64.40.

Share market volatility fell both domestically (-5.85%) and in the US (-6.60%).